28 June 2013

Over the last few weeks, we’ve seen a marked increase in
enquiries for both Right to Buy properties and those looking to purchase on a
Shared Ownership basis.

Right to Buys are usually via the local council selling
their properties to the existing tenant at a discounted price. This
discount can be up to £75k and tenants must have been with the council for five
years or more. Some lenders will allow borrowing of up to 100% and
possibly slightly more if the extra funds are to be used purely for home
improvements. If you
resell your home within five years you will usually have to repay some or all
of the discount you received, however remortgaging is usually allowed in this
time period.

Shared Ownership
Schemes are provided through housing associations. You buy a share of
your home, between 25% and 75% of the property value, and pay rent on the
remaining share to the housing association. You usually have the
opportunity to purchase a bigger share of the property later on (normally
called ‘staircasing’). Local housing associations must confirm your
eligibility in order to join these types of schemes.

Both schemes are
proving popular in the local area and a wide number of lenders are looking to
lend in both scenarios and to a number of different customer types, so always
seek advice.

Whilst mentioning
advice, there are a lot of good rates in the market currently. Some of
these are only accessible through certain brokers. Make sure you are
speaking to someone who has access to the Whole of Market and access to these
superb rates as they can be withdrawn with little or no notice. With this
in mind and as mentioned in a previous write up, some lenders will launch
market leading products but only for a short period, in order to attract volume
business. The latest to do this is Accord mortgages (owned by Yorkshire
Bank). Sadly by the time this goes to print, this particular set of
fantastic products will be gone as they were only available for 7 days, so I
will not go in to detail, but they were good and there are likely to be more
soon. Remember, despite what some say, you do not have to take your
mortgage with any one source even if they insist that is the deal. Shop
around and make sure you are getting the right deal for number one!

20 June 2013

The Council of Mortgage Lenders
(CML) has released figures reporting that the remortgage market had its best
month for five months in April.Gross
lending was boosted by 5% from remortgage finance.Signs that the low rates are attracting new
customers and homeowners are keen to make use of the great deals currently
around.

It was also good news for First
Time Buyers.46% of all house purchase
loans advance in April were to those purchasing their first property.The market is still incredibly tough, but
these are signs that things are slowly improving.

With this in mind and so many rate
changes and reductions, lenders will look closely at an individual’s recent
payment profile, how many recent credit searches have been incurred by financial
institutions and more.So don’t give
them any excuses not to lend to you!The
more credit searches you have on your profile, over a recent amount of time,
the more likely your credit score will be lower as a result.Try and ensure there’s no missed or late
payments as these will also decrease your credit score.In short, your credit search / score are the
basis on which most lenders will initially decide whether to lend to you or
not.The best rates will almost
definitely go to those with the best credit scores.If you’ve not checked your credit file
before, it is well worth a review.Experian and Equifax tend to be the main two providers used in our
market with both offering free initial trials and you can find links to these
on the AToM website.

Finally, so you’ve done all the
hard work and gone through the whole mortgage process with the lender providing
you with a mortgage offer and you can now sit back and relax.Wrong!Although the mortgage offer has been issued, until you have completed on
your new mortgage, the lender can still decline to proceed with their
offering.If you take out any finance,
have lots of credit searches done or miss any payments before completion, it
could be that the lender will re-credit score you before completion and uncover
something that might not be to their liking.If in doubt, seek advice.

13 June 2013

With the rental market continuing
to be buoyant, and with no signs of declining, the mortgage market is active as
lenders recognise the huge demand for Buy to Let (investment property)
mortgages. These can be from a first time landlord, right through
to the experienced House of Multiple Occupation (HMO) / Student Let portfolio
investor. Whatever the scenario, there will probably be a lender
who will look to assist.

This sector has also recently been through a price war, rates are competitive
and may also come with package deals, such as free valuation and free legals.

But with so many lenders now in this sector, rates may not be the main area of
competition any longer. Some lenders are also reviewing criteria in order
to attract new business. Many lenders historically would not allow first
time landlords, anyone earning an income less than £25k, or those who have more
than ten properties, to give you a few examples.

However, we have seen recently
that criteria is being relaxed and lenders are competing to attract more
business. As such, one of the main Buy To Let lenders, BM Solutions, has
recently removed their minimum income requirements. This now means there
are three or four lenders in the market who no longer require a minimum
income. They will still require proof of income to ensure affordability,
should a tenant void be incurred.

Buy to Let properties will often
provide a modest monthly return over and above the mortgage payment. The
additional amount can be used to supplement income, or, with flexible
mortgages, can be used to “overpay” the mortgage and reduce the term.

Most lenders in this sector will
require the rental income to exceed the mortgage payment by up to 125% and,
after costs such as managing agents this should leave some spare cash to cover
repairs, maintenance and landlords insurance. It should also enable a fund to
be established to cover the mortgage payment in the event that there is no
tenant in situ for a while. Remember that, whatever the deal, lender terms
and conditions will always
apply.

06 June 2013

If you read the national press,
the ‘funding for lending’ scheme appears to be under some scrutiny.In short, the scheme was designed to provide
relatively cheap funding from the Bank of England to a number of lenders as
long as they maintained or increased their net lending on mortgages (or
business loans).However, recent reports
suggest that since its launch in August 2012, the FLS scheme has seen an
overall decrease in net lending of 1.8bn and a £300m decrease in Q1 2013
alone.

Other reports highlight a
reduction in house purchases for April 2013.But if you delve slightly more in to the figures, the house purchase
numbers for April were 53,710, representing £8bn.This was against 53,674 loans approved in
March!So for the sake of 36 deals, the
purchase market is not in apparent ‘freefall’….!This should not make for newsworthy headlines!Of course the headlines did not cover that
the number of approvals for remortgaging were by up by nearly 2,000 compared to
the six monthly average of 28,323 to at 30,313, and £4.3bn in volume.

From dealing on the front line, I
would dare to suggest that consumer confidence in financial services appears to
be the highest it has been for some years.People are selling, people are buying and many are remortgaging!It’s not just set to one geographical area
either, although appears to be more southern based than northern, but it really
is ‘all types of mortgages’!From the
straight forward, to the complex, to the commercial shop front, to the credit
issues, to the first time landlord with their first investment property, we are
seeing many different scenarios.We’re
even having lenders come back to us on a Monday, backtracking on their previous
decline decision on the Friday, having thought about the case and it’s scenario
over a weekend and now wishing to offer terms!This really does bring a new meaning to the ‘thinking outside the box’
analogy.

There are also a few new lenders
waiting in the wings to launch and create more competition in an already
increasingly competitive market.One that
we know of will be filling a current gap in the market place, and that’s all
I’m currently allowed to say!But more
lenders competing for business can only be a good thing to the end consumer.